Wipro CEO: I feel good about improvement in client mining

Soon after the announcement of the second quarter results, Wipro CEO Abidali Neemuchwala spoke to TOI about the company's strategy and challenges.

Bengaluru: Soon after the announcement of the second quarter results, Wipro CEO Abidali Neemuchwala spoke to TOI about the company's strategy and challenges.
Wipro had two clients filing for bankruptcies recently and trouble in the healthcare sector. Is the worst behind you?We don’t see any one-off event in the next quarter. I feel quite good about our overall business rhythm. The hotspots we are working on is the India business and healthcare. We are pivoting the communications business to 5G. We are comfortable in the banking and financial services and consumer spaces. From an execution standpoint, we have invested into digital that comprises 31% of our revenue which is industry matching or slighting higher than some of our peers. We have worked on our consulting practice that has had a positive impact on our digital revenues. We had issues in client mining of large accounts. We have solved that problem and the average revenue per customer has gone up. I feel good about it.

Why have you carved out the India public sector undertaking and government business as a separate one from the overall IT services business? It’s a different rhythm, those are long term projects, they don’t make enough money and there is a higher amount of balance sheet items in terms of equipment, products and collections. It helps us bring focus.

Healthcare is an ongoing concern. Is there some predictability in the business?

There are elections in the US and depending on it, it can change dramatically. The payers are private companies and they decide if they want to participate depending on how much subsidy the government plans to give. When we acquired HPS (US healthcare insurance tech company), the revenue was $250 million, it has gone down to $130 million in run rate terms. We will pivot into adjacent services like Medicare that is applicable for someone who is over 65. Obamacare is for those under 65. We have a strong team that understands the US healthcare system. We are working to build platforms across the value chain.

The number of active customers has dramatically dropped from 1,254 to 1,193. Have you shrunk your small accounts?

This is a Wipro specific issue. Wipro had historically not done client mining well. And the reason was we participated in discretionary spends of our customers’ projects. When you mine accounts, you need to have more annuity revenue. Also, historically Wipro was organised by service line, so account mining became a challenge. Would you have 10,000 customers with $1 million revenue each or 1,000 customers with $10 million revenue?

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